The Stars Group Fine Squashed

The Stars Group (previously Amaya) has escaped paying a major fine – for now. The Canadian operator is fully expecting the Court of Appeals ruling, which found in their favour and quashed an $870 million fine, to be challenged.

Unlawful Service Allegations

The Commonwealth of Kentucky launched legal action against PokerStars in 2010, when it was owned by Rational Group. The allegations were that the operator had illegally provided services to 34,000 players in Kentucky between October 2006 and April 2011.

Amaya acquired Rational Group in 2014, and was fined $290 million in November the following year. Thomas Wingate, a judge in the Franklin Circuit Court, made the original ruling and then tripled the amount in December 2015, at the request of the state of Kentucky. Amaya was rebranded as the Stars Group in 2017.

The fine was carried over to the renamed company, but the Court of Appeals recently reversed the judgement saying that if the Commonwealth’s complaint was allowed to go forward, the result would be absurd and unjust.

Martin Goldstein, Executive Vice President and Chief Legal Officer of the Stars Group, said his company applauded the decision of the 3-judge panel. He added that the case’s merits prevailed, and that the Stars Group was looking forward to putting the matter behind them.

They also intend to petition for the release of a supersedeas bond. The $100 million bond was posted to stay Wingate order during the appeal process. At the same time, however, the operator made it clear that they do not expect the matter to end here.

Possible Future Developments

The Kentucky Commonwealth is likely to petition for a rehearing in the Court of Appeals, or to request that the state’s Supreme Court review the case. If the Supreme Court hears the appeal, the Group has made it clear that it will dispute any and all liability.

Strong Positions on Both Sides

At this juncture, an out-of-court settlement is still possible and would prevent further escalation. However, since both sides feel strongly that they are in the right this is appearing increasingly unlikely. The Stars Group defended its position by arguing in the Appeals Court that Kentucky was trying to exploit a statute that was hundreds of years old.

Aside from being out dated, this legislation was intended to allow individuals who had incurred losses while playing games, to bring actions against their winning opponents. The intention was never to create a way for large groups to go head-to-head. No specific customers were ever identified as having lost money while making use of PokerStars’ so-called illegally-provided services during the time period in question.